Sub-metering in condos, apartment units can lead to big reductions in electricity consumption

My Clean Break column this week highlights a commissioned study by Navigant Consulting, which looked at the impact that sub-metering has on electricity consumption in apartment units and condos versus those units on a bulk metering/billing system. The reductions appear to be quite large, as you’ll read, but there’s one caveat before you read on: lower electricity use doesn’t necessarily translate into lower bills. Given the additional fees charged by sub-metering service providers, the financial benefits of sub-metering are more murky. At the same time, while it might not lead to dollar savings today, it can certainly empower residents to shield themselves from dollar increases tomorrow. Another caveat: the research, while conducted by Navigant, was commissioned by EnerCare, a sub-metering provider in Ontario.

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Tyler Hamilton

There are nearly 410,000 apartment and condominium units in Ontario that could be—but aren’t—individually monitored for their electricity consumption.

Instead, the buildings in which they’re located engage in “bulk” billing, meaning a single bill is issued for an entire building. The amount on that bill is equally divided by the number of individual residential units in that building.

It’s a simple formula, sure, but it’s one that encourages waste. It means residents who make an effort to conserve and use relatively less electricity end up subsidizing those who always keep the lights on and load their homes with energy-hogging devices and appliances. There’s no incentive for them to conserve.

But what if 410,000 residential units in Ontario currently on bulk metering were suddenly put on individual sub-meters – i.e. smart meters for building units? What would be the impact on electricity conservation?

The short answer, according to a study this week from research firm Navigant Consulting, is that the average reduction in electricity use would be “significant.”

Navigant found that in buildings heated by electricity average consumption would fall by 27 per cent, or 106 kilowatt-hours a month, while those building units that don’t use electricity for heating would see average power use reduced by 34 per cent, or 112 kilowatt-hours a month.

“If sub-metering were deployed in all currently bulk-metered, multi-residential buildings the annual potential electricity savings following complete deployment over five years could be 3.3 terawatt-hours annually – more than all of the electricity produced from Ontario’s wind power facilities in 2010,” according to the study.

During peak times, it would equate to eliminating the need for 383 megawatts of generating capacity, equivalent taking a medium-sized gas-fired power plant out of the province’s fleet of generators.

It should be noted that Navigant didn’t do this study out of the kindness of heart. It was hired by EnerCare Connections (formerly Stratacon), one of the largest suppliers of sub-metering devices in Ontario. EnerCare’s interests are obvious. At the same time, Navigant is a respected international research and consulting firm not known to customize conclusions to satisfy its clients.

As for how Navigant came to such conclusions, it relied on data from Natural Resources Canada, Statistics Canada’s 2007 Census data, and hundreds of samples of monthly electricity consumption data from customers of EnerCare that had already switched from bulk billing to sub-metered billing.

So if the conservation benefits are so obvious, why isn’t there a mass rush to embrace sub-metering?

Sub-metering in buildings is for some a hot-button issue. Clearly, individuals in buildings who use relatively more electricity than their neighbours are going to end up paying a higher monthly bill. It’s hard to sympathize – either they should pay for what they use or use less.

It’s a bit trickier with renters. Switching to more efficient light bulbs can only go so far. Apartment tenants are often stuck using old and inefficient appliances that gobble electricity. They can reduce use of these appliances, but they’re still at the mercy of landlords not keen on upgrading to more efficient models.

Chris Jaglowitz, a “condo” lawyer at Gardiner Miller Arnold LLP and publisher of the Ontario Condo Law Blog, says a big sticking point with all building residents relates to the extra charges they must pay to get their bills separately.

Then again, they’re paying more because electricity prices have been going up – and will continue to go up. With sub-metering, at least condo owners and tenants can take some actions to shield themselves from the impacts of rising electricity rates.

4 thoughts on “Sub-metering in condos, apartment units can lead to big reductions in electricity consumption”

When it is said that “people are paying more” for sub-metering their actual electricity usage as opposed to having hydro included in their rent, this refers to the “Customer Charge” on their monthly bill, which consists of two parts:
1) Paying off over time the considerable investment involved in installing a complete sub-metering system in a building.
2) The cost of monitoring and recording electricity usage by each individual apartment, issuing bills accordingly, collecting payment, and following up on non-payment. This is incomparably more complicated than collecting a single payment from the landlord for all the electricity used in the building.

It is strictly illegal in Ontario to mark up by any amount the wholesale price of electricity when billing tenants. This point may not be clear to your readers.

Landlords are cheap. Remove their need to pay for heating and electricity, they have no motive to improve the energy efficiency of the buildings. It should be cheaper for the landlord to upgrade the building to reduce his energy needs thant to switich to submitering and put the onus on the tenants.